Tuesday, June 19, 2012

How to Get a Mortgage Loan After Foreclosure

By Valencia Higuera

A mortgage foreclosure can hurt your personal finances and your credit score can drop several hundred points. Having a low score makes it increasingly difficult to secure new lines of credit, including an auto loan or mortgage loan. But even with a foreclosure on your credit report, you can get a mortgage for a new home loan. You may not qualify for a new home immediately after losing your home. But with time, your credit score will improve and lenders will consider your application.

Re-establish your credit history after a foreclosure. Apply for a sub prime or high-interest rate credit card to help rebuild your credit history. Secured credit cards are also available from local banks. These require a security deposit and generally feature a monthly maintenance fee.

Start saving money for your down payment. Open a savings account and resolve to deposit a certain amount each pay period (pay your bills first, and then deposit the leftover funds). Use this money for your down payment. Minimum down payment amounts vary according to loan programs, but range between five and 20 percent of the sale price.

Maintain a good payment record. Avoid late or skipped payments after a foreclosure to add points to your FICO score and qualify for a mortgage loan after foreclosure.

Consider an FHA mortgage loan. Backed by the Federal Housing Administration, you can apply for an FHA mortgage loan three years after a foreclosure, and down payments on FHA mortgages will not exceed five percent of the sale price.


http://www.lenderva.com

1 comment:

  1. A foreclosure can impact your ability to obtain another home loan relatively quickly after the event. The exact length of time will vary, though. And it'll depend on factors such as the type of home loan as well as the lender extending it.


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